When your business is sued in federal court, it can be a strange and surprising experience. A common question that we receive from business owners is, “How can my business be sued in federal court over a contract? Isn’t federal court just for crimes and serious litigation?”
How it Works
In most cases, federal cases over contracts are brought because one party is from a different state than the opposing party and there is more than $75,000 in damages that are at issue in the lawsuit. In other words, your first instinct might be right: a contract case only enters the federal court because it is a pretty big deal.
Beyond this, contract cases in federal court are much different than contract cases in state court. A breach of contract action requires that the plaintiff (the person bringing the lawsuit) demonstrate that the defendant violated the terms of an agreement. This agreement doesn’t have to necessarily be written (although it usually is when there is a lot of money at stake).
Several defenses to contract actions exist, including proof that the contract was impossible to perform or that the plaintiff violated the contract first. In rare cases, the contract itself might violate state or federal law, which means it cannot be enforced in court.
More About Federal Court Cases
Cases in federal court should be taken seriously because they tend to move quickly. This is especially true of the Eastern District of Pennsylvania, often referred to as “the rocket docket” because of the speed with which the cases move to trial. In other words, if you are not preparing from day one, you are not going to be ready by the time the case gets to the summary judgement phase and to trial.
Contact Cornerstone Law Firm
If you or your business has been sued in federal court, it is important to seek litigation attorneys who can handle your case. Contact the Cornerstone Law Firm and speak with our experienced federal litigators to discuss your options in moving forward and how you can best defend your case.